Sunday, July 10, 2011

Remember Senator Baker's famous Watergate question: "What did the President know, and when did he know it?"

Here's another: What did the FCC know about its broken intercarrier compensation regime, and when did it know it?

We don't need to find any missing 18 minutes of tape to know the answer to the above question. It's right in the FCC's official books.

Here's what the FCC said back in 2001:

“We believe it essential to re-evaluate these existing intercarrier compensation regimes in light of increasing competition and new technologies, such as the Internet and Internet-based services, and commercial mobile radio services (CMRS). We are particularly interested in identifying a unified approach to intercarrier compensation – one that would apply to interconnection arrangements between all types of carriers interconnecting with the local telephone network, and all types of traffic passing over the local telephone network.”

“The existing intercarrier compensation rules raise several pressing issues. First, and probably most important, are the opportunities for regulatory arbitrage created by the existing patchwork of intercarrier compensation rules.”

Of course, with the development of even more competition and the deployment of even newer technologies, the patchwork intercarrier compensation regime is even more problematically anachronistic today than it was a decade ago. In short, the regulatory arbitrage enabled by the current uneconomic regime creates significant inefficiencies in our telecom networks and increases consumer prices.

Well, ten years later it looks like the FCC may – in light of past inaction I emphasize "may" – shortly be prepared to finally address in a serious way intercarrier compensation reform, along with reform of the universal service subsidy regime.

That's why the Free State Foundation's seminar on Wednesday, July 13, at 8:45 AM, at the National Press Club is so important and timely. We have an excellent lineup of leading experts ready to explain what should be done, when, and how: Tom Tauke, Verizon; Jerry Ellig, Mercatus Center; James Assey, NCTA; Mike Romano, NTCA; and Deborah Taylor Tate, former FCC Commissioner and FSF Distinguished Adjunct Senior Fellow. Event details and RSVP information are in the sidebar to the right.

Now you know the answer to what the FCC knew and when it knew it. Please bring all your other USF/ICC questions and comments to the seminar to get all the skinny.